BRX Pro Tip: Your Rate Should Reflect Your Value
Stone Payton : And we’re back with Business RadioX Pro Tips. Stone Payton and Lee Kantor here with you. Lee, what counsel, if any, do you have regarding how you set up your fee structure?
Lee Kantor: I think your fee structure should always, always be about your value that you’re delivering, not the time it takes to do the work. You have to stop charging by the hour. If you’re a professional service provider, hourly rates, it signifies inefficiency. The less efficient you are, the more money you make. That doesn’t make any sense. The better you are at something takes less time, so you should get paid less. That doesn’t make any sense. If anything, it’s backwards.
Lee Kantor: Instead, you should focus on charging based on the value you deliver. What’s the outcome worth to your client? That’s what you should charge. A one-hour conversation with the right advice might be worth $10,000. A hundred hours of work that doesn’t move the needle on your business could be worth nothing. So, when you shift your thinking to value-based pricing, everything changes. You’re incentivized to be efficient. You attract clients who care about results, not just work. And you stop resenting your work because you’re being paid for the impact, not just your time.
Lee Kantor: So, here’s the challenge this week. Identify one service you currently charge hourly for. What’s the value it creates for your client? What should that be worth? That’s your new baseline. Start there.
